Brazil: Inflation edges up on higher gasoline prices
August 5, 2011
In July, consumer prices added 0.16% over the previous month, which was virtually unchanged from the 0.15% increase tallied in June and broadly in line with market expectations of a 0.18% monthly increase. The pattern of price changes broadly mirrored that of June, with the notable exception of transport prices, which added 0.46% month-on-month (June: -0.61% mom), due to higher fuel costs. As a result, annual headline inflation went up from 6.7% in June to 6.9% in July, the fastest pace in six years, and lingers above the tolerance margin around the Central Bank's target of 4.5% ( 2.0 percentage points) for a fourth straight month. Despite mounting inflationary pressures, the Central Bank expects inflation to decline to 5.8% by the end of 2011 and to 4.8% by the end of 2012.